Page 46 - RB-80-17-1

SRI LANKA
The company headquarters in Colombo
Thilakyapa Bandara,
Production Head Savitha Tyre Solutions
processes each month, while its mixing unit manufactures and supplies 1,200 tonnes of rubber each month to outside plants for manufacturing solid tyres. Sri Lanka is regarded as the one of the largest producers of solid tyres in
generation radials, and Richard Pieris feels that improving the cost per km is the only answer to beat the low-priced imported tyre brands.
Currently, the retreading industry is struggling due to a shortage of
transport in Sri Lanka, and they are visible on the roads everywhere. It’s a huge market and retread tyres are popular among auto rickshaw drivers,” he said. Nearly 1.3 million three wheelers are operating on Sri Lankan roads, largely from Pune based Indian company Bajaj and TVS.
Kandy’s retread market is worth almost 20,000 light truck/truck retread tyre market per month, and it has been growing by around 4,500 units annually for the last
couple of years. Kandy is a major business hub and is the second largest city in Sri Lanka as well as being the capital of Central Province. Major industries include textiles, furniture, information technology and Jewellery.
Kandy is a key market in the retread sector as major players like Richard Pieris & AMW have plants in the city, with 3K having a presence through franchisees along with couple of smaller retreaders.
the world.
Despite its overwhelming presence in the domestic market, the company’s tread rubber export has yet to take-off in a major way. “We started exports of tread about three years ago to the countries of Bangladesh, Pakistan, Norway and recently to the USA. But it is more an off and on affair, and we are not regularly shipping tread every month. We have received positive response in the US market and we hope exports will gradually pick- up,” he explained.
As in any other market, the Sri Lankan retread market is also marred by the presence of one-
good casings in the market. However, in the recent past, a few big-ticket investments have been announced in the areas of new tyre manufacturing. “The new projects would launch quality tyres in the higher price range and that would bring back the good casings in the domestic market for retreading industry,” Pradeep believes. Richard Pieris Tyre Company Ltd is part of the diversified conglomerate Richard Pieris & Company PLC with interests in retail, tea and rubber plantations, tyres, furniture, plastics, automotive, lighting and electronics.
Elgi has expanded its client base in Sri Lanka by installing a new plant in Dombagoda, located in Matale district in Central Province about 50 km from Colombo. Elgi’s fifteenth customer in the country has already started functioning and has the capacity to retread 1,500 tyres each month.
The move is part of a plan to improve
production
levels at the
company’s
tread
making
plant in
Dankotuwa
Industrial
Estate on
the outskirts
of Colombo,
which is
currently
running at
less than
half the installed capacity of 200 metric tonnes per month.
“We produce between 80-90 tonnes each month to feed the local market and export about 50% of production to Elgi facilities in Kenya and the Netherlands,” informed Roshan Fernando, Manager (Operations), Elgi Rubber Company Limited. “However, the Sri Lankan market is flooded with imported radials, and has been considered a difficult market for retreading for the last five years,” he added. When asked if Elgi has any plans to raise production at the unit in the near future, Roshan said, “With the one-generation radials entering into the market, production has been stable for the last 4-5 years. We hope to improve it to 100 tonnes in the next couple of years.”
In order to improve production levels, the Elgi subsidiary is
focusing on expanding its client base throughout the country. “We are in touch with couple of fleet- owners who are considering installing Elgi plants and hopefully one of these will invest within the coming year, which will improve plant productivity further,” he said. The fleet operators in question have about 70 buses each.
Elgi Expands Client Base in Sri Lanka
Kandy Retreader to Double Capacity
In addition, there is some market optimism due to an increase in road construction in the North of the country since the ending of the civil war. The government is investing in building and expanding the road network towards the North of the country. The first phase in the construction of the Colombo – Kandy expressway has already been started from Kadawatha to Mirigama. The second phase will commence from Mirigama to Kurunegala. The third phase will be built from Kurunegala to Kandy. There is a plan to extend the expressway up till Jaffna, capital of the Northern Province. In the last three years, two expressways have been built from Katunayake to Colombo and Colombo to Matara.
Kandy based 3K Holding franchisee Savitha Tyre Solutions is planning to expand its plant by installing a second chamber to double the production. The plant opened in 2013 and currently
retreads 1,000 tyres per month with one 10-tyre autoclave.
The second tyre chamber will most likely to be installed by the end of 2017. “We have to raise plant capacity to meet the growing
demand and the Kandy market has been consistently growing for the last few years,” said Thilakyapa Bandara, Production Head Savitha Tyre Solutions. Interestingly, among the 1,000 tyres the plant retreads, 300 are for three wheeler auto rickshaws. “Auto rickshaw is one of the major means of
46 Retreading Business